Wednesday, September 17th, 2008
I just don’t get it.
When I was in college, one of my majors was Business Administration. I studied finance, economics, etc. I distinctly recall learning about free markets. Free markets are the hallmark of capitalism.
Today the United States government nationalized insurance. On this day, Constitution Day, it seems even more perplexing that the federal government would reach beyond its purview. Nowhere in there is the federal government afforded the right to nationalize insurance.
I know we are told this is to calm the markets. The stock market fell 455 points today. So much for that theory.
The feds bailed out Fannie and Freddie last week, declined Lehman Bros. any money, and then propped up AIG today. What will it do if Goldman Saks and Morgan Stanley fail? They are both primed to do so.
I know I am a simple man, but I just don’t understand this. If I open a pizza store and it fails, the bank seizes my assets. Presumably it will sell them off to get their money back. Either way, I am SOL because I couldn’t make my business successful.
If my pizza store is a success, I may decide to expand. That’s good for me. It’s also good for my employees and good for the community. If I continue to be a success I may open more stores. If I am really good, I may open lots of stores. Heck, I may even be as large as McDonald’s one day. Bully for me!
Let’s suppose I am and I continue to push to be even larger still. I begin borrowing more money than I should. I begin opening stores in areas that aren’t my normal demographics. I leverage too much too fast. All of a sudden I am strapped for cash. The banks begin requesting payments and I just don’t have the money. All of a sudden my pizza empire is at stake.
Is the federal government going to bail me out?
Of course not. There are other pizza joints. They may be smaller, but they still write insurance policies sell pizzas.
Perhaps the market doesn’t need a colossal insurance carrier pizza chain. Perhaps smaller chains will serve the community better.
The last thing our federal government needs is to get involved in a new business. Nothing good will come of this.
Oh, and the right to replace management will be a joke, I suspect. Any of those folks ousted will take a severance check with him.
The federal government has no role in insurance. Period.
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Tuesday, September 16th, 2008
I backed Fred Thompson earlier in this campaign cycle. The reason I did so is that he was right on the issues; primarily that there are limits to the federal government. Those limits were placed there in the Constitution. Fred understands those limits.
If the government stuck to what it’s supposed to stick to, our lives would be much better. There is no federal role in education. That does not diminish the importance of education; it merely sets who is repsonsible for it.
Thompson ran a horrible campaign and packed things up after the South Carolina primary. He’s back on the scene now with his PAC. Sigh . . .
But he’s still right on the issues. Today he published an article at Townhall.com. Townhall.com is one of the few sites on my blogroll. Thompson’s folksy manner shows up in his article today. Let it not detract from the message: the federal government is involved in too many things it shouldn’t be. It is not the savior to all, as some would have us believe.
Our Founding Fathers knew more than a little bit about human nature. It is one reason why in the Constitution, the federal government was given certain delineated powers and no others. I hate to burst another bubble, but our government simply doesn’t have the authority or the capability to be the guarantor or insurer of our every need or desire. Isn’t it time we started sending that message loud and clear to the big enablers in Washington?
If ever there was a must-read piece, this is it. Fred gets it!
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Monday, September 8th, 2008
Admittedly, I have a small town sense about the world in which I live. It doesn’t need to be as complicated as some make it to be.
Take capitalism for instance. The way I was taught, businesses create widgets to sell. Folks either buy the widgets or not. Government’s role in the process is supposed to be Laissez-faire.
It makes sense too. One of my aspirations over the years has been to open a restaurant. If I decide to do that (I won’t, but for sake of argument . . . ) I will purchase/rent a property, purchase/lease equipment, hire some workers, paint the walls, buy some food, and hang a shingle out front.
If my food is good and the prices right, folks will come to my restaurant. If I attract enough folks, I’ll make enough money to pay all the bills and perhaps turn a profit. If I don’t, I will go out of business.
It’s as simple as that. I am not a risk-taker with my money like that so it’s unlikely that I would ever open a restaurant. I do not invest in junk bonds, start-ups, or Willie Loman’s brother’s ventures. I opt for safer investments. It is more conservative, but the reward is less too.
If I were more daring, I would have taken my ideas to market. I have had two ideas in my life to make money. Both originated when I was merely a boy. One was to rent wedding dresses. I never understood the fascination of paying lots of money for a dress that can’t be worn more than once. Many men rent suits for weddings (I loathe wearing used clothing, fwiw). The other was to have a notepad attached to a car’s windshield so one could jot notes while he drives. I took neither to market thus made nothing on those ideas. Others did and made money. As they should since they took the risk.
The presence of risk is why some make money and othrs don’t. I try to minimize risk. That is why I live in a modest house in a poor county and teach in a public school for a living. Others thrive on risk. Some succeeed wildly while others crash and burn. Risk is the danger that keeps me from playing.
But if one removes the risk, then the rewards disappear. At least that is how the capitalism I learned in school worked.
Today the federal government stepped in and massively bailed out Freddie Mac and Fanny Mae. Earlier this year Bear Stearns. Twenty-eight years ago it was Chrysler.
When government steps in to bail out an industry, it means you and I will pay for it. This will be hundreds of billions of dollars. The Republican administration hasn’t addressed how it will pay for it because it doesn’t have to be concerned with that. President Bush will be long gone before this affects a budget. No, the next administration will have to break the tax consequences to the American people.
Should government step in? If my restaurant faltered, you can be damn certain that government would not provide me help. Nor should it. Businesses are for profit enterprises. The reward for doing a good job is profit. The consequence is losing one’s shirt. When government uses taxes to keep business from losing its shirt, it alters the market. Where is the risk to keep business from mismanaging itself? Rewarding the industry for doing a lousy job is why we subsidize Amtrak and the airline industry.
We bailed out Lee Iacocca 28 years ago, but Chrysler is still a company struggling to survive. Yes, it has survived, but it is not a company thriving.
What happened today was not conservative governing. What happened here was politics. Some very rich people were told they would not be held accountable for running their businesses into the ground. Not only that, but you and I will pay dearly for the mismanagement of these already wealthy people.
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Thursday, August 21st, 2008
Uh oh . . .
The corners at Landis and East avenues in Vineland, NJ provide an interesting contrast. One corner once housed a theatre complete with an art deco sign. Across the street is a small gas station that is surrounded by Sacred Heart school and church. Across the street from that is a pizza joint surrounded by a Day’s Inn. Across from there on the fourth corner is the East Landis Hotel.
Both the Day’s Inn and the East Landis Hotel are eyesores and attract the seedy element. Drugs, criminals, etc. live in these places. These hotels have frequent police calls and are used as halfway houses.
After years of political wrangling, the long-closed theater is undergoing redvelopment. My understanding is that the gasoline station has been purchased and will be razed.
That leaves the two hotels. Indeed they are blighted.
The city wants to redevelop this intersection. There is a (re)developer. It sounds like a wonderful project that would improve a section of downtown Vineland. I hope it happens.
But here’s the rub. The hotels have not sold. The property owners want more money. Without owning them, the project stalls. Today’s paper dangles the threat of eminent domain to seize the properties if they do not sell. This would be wrong.
Yes, the community would be better off with these slums low-budget hotels gone, but business must happen. If they do not want to sell, government should not be used to take. What if the city wanted Sacred Heart’s property? Would we be okay letting it take that?
Eminent domain is a dangerous tool. Despite the Kelo decision, commandeering land for redevelopment is a bad idea. Vineland needs to meet these business owners’ prices or get out of Dodge. You do not get to low-ball and then take.
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Wednesday, April 30th, 2008
Tonight when I sat down to check something I noticed an e-mail from a fellow geocacher who asked me if I had seen today’s Star-Ledger. No, I had not. After searching online, I wasn’t able to see what Ken had pointed to so I went out and paid the $.50 for the paper copy. There it was on the Op/Ed page.
It seems New Jersey’s state paper printed part of the piece I wrote the other day about closing the state parks. Mind you, it ignored the under story to why Corzine proposed closing the parks. It would have been nice to have had a heads up that they were going to run the piece.
As I draft this, I finally found the piece online. It’s part of the Ledger’s New Jersey Blogs section.
Posted in New Jersey, Politics | 1 Comment »
